Olaplex sales plummeted by nearly half during the hair care brand’s second quarter of trading in 2023.
Net sales fell by 48.2% to US$109.2m for the period ended 30 June 2023, with the brand’s Professional category experiencing the largest declines of 61% to $40.9m.
Olaplex’s Specialty Retail channel also saw a significant drop in sales, down 53.7% to $29.8m during the quarter, and Direct-To-Consumer sales shrunk by 6.4% to $38.5m.
The company attributed the sales slump to a lower level of demand for its products from consumers.
This was exacerbated by the decision to rebalance the inventory of its Professional and Specialty Retail channels during the quarter.
"Our second quarter performance was below our expectations as our Professional and Specialty Retail channels experienced slower demand and some customers right sized their inventory positions in response to current trends,” said JuE Wong, Olaplex’s President and CEO.
“As such, we have updated our assumptions for the remainder of the year and reduced our fiscal 2023 outlook.”
Olaplex has now lowered its forecast for the 2023 financial year to be in the range of $445m to $465m, a decrease of nearly 24.4%
This decision was made due to the “weaker than expected” second quarter results, as well as an assumption of continued low demand for the remainder of the year.
“We are intently focused on stabilising demand trends in the second half of 2023, while increasing and optimising the mix of our marketing investments in support of this objective,” added Wong.
“As an industry-leading brand backed by science and technology, we remain confident in our long-term opportunities."
This has been the third consecutive quarter of sales declines for the professional hair care brand, which has also been grappling with a lawsuit filed against it in February 2023.
The litigation alleges that its No. 0 to No. 9 products cause hair loss and scalp blisters, and has been brought forward by more than 100 customers seeking damages.
The lawsuits drew attention online, with discussions around the allegations occurring across social media.
Olaplex was quick to respond, however, with Wong issuing a public statement arguing against the “baseless accusations”.
“Olaplex products do not cause hair loss or breakage,” said Wong at the time.
“Olaplex products are safe and effective, as millions of our customers can happily attest.
“We want to reassure our community of professional stylists, customers and fans that they can continue to use our products with confidence.”
According to the US District Court for the Central District of California a trial date has not been set.
A motion to dismiss was filed by Olaplex, which is when the party believes that the complaint is legally invalid, as well as opposition filings by the plaintiffs.
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